Global Cement News

Turkey: Cement producer Adana Çimento has reported that its profit after tax fell by 25% to US$42m in 2011 from US$56m in 2010.

Sales revenue rose by 2% to US$173m in 2011 from US$169m in 2010. Total revenue rose by 6% to US$182 from US$171m. Adana Çimento has recorded profit for the last three years. Notably, the exchange rate between the Turkish Lire and the US Dollar has risen by 22%, to 1.89 per dollar in 2011 from 1.55 in 2010.

Liberia: Dangote Cement Liberia, a subsidiary of the Nigerian conglomerate Dangote, has officially signed up for a US$35m cement plant in Liberia.

Speaking during the signing ceremony held in Monrovia at the head office of the National Port Authority (NPA) on Bushrod Island, the president of Dangote, Alhija Aliko Dangote, disclosed that his company will employ hundreds of Liberians and other nationals. Operation is expected to commence by the end of April 2012. Signing on behalf of the Liberian Government, the Managing Director of the NPA, Madam Matilda Wokie Parker lauded the initiatives being applied by the company to invest the economy.

The opening of a new cement factory in Liberia will bring the total number of cement plants to two. The existing plant, the Liberia Cement Corporation (Cemenco), currently employs 63 workers.

India: The Union Budget for 2012-13 has divided the cement industry on the likely impact of its new measures. An increase in excise and service tax is expected to increase the price for consumers, whilst an expected demand increase for cement will be driven by housing and infrastructure development.

Finance Minister Pranab Mukherjee proposed to exempt imported non-coking coal from the current basic duty of 5%. It is anticipated that this will have a positive impact of 1-1.5% on the industry's operating profit. The cement industry is the third largest consumer of coal after power and metallurgy, requiring about 15-20Mt/yr. At present, the industry meets close to one-fourth of its total coal requirement through imported coal.

Cutting the duty on imported non-coking coal has been offset by an increased excise and service tax of 2%. This hike in excise duty is expected to increase the cost of cement for consumers as manufacturers pass on the impact. One positive feature is the 30% abatement on the retail sale price, a long pending demand of the industry.

Meanwhile on the demand side the measures set to encourage housing and infrastructure development are expected to boost sales.

Overall opinions on the Union Budget have remained neutral for the cement industry, as the increase in excise duty combined with the recent increase in the cost of rail freight will result in a considerable increase in the cost of delivered cement. This will then impact upon the cost of construction. Although welcome the 30% abatement of the retail sale price will also pose some practical difficulties as the sales price changes with different markets.

Japan: Taiheiyo Cement is aiming for a group operating profit of around US$600m in the 2014 fiscal year, an increase of 90% on its projection for the current fiscal year, which ends on 31 March 2012. The target will be included in an upcoming midterm business plan that runs through to March 2015. The underlying assumptions include total domestic demand rising by 4% to 43Mt/yr. Taiheiyo Cement anticipates a 2Mt/yr boost from earthquake rebuilding.

In its domestic business, the Japanese market leader is likely to seek a 10-20% increase in its profit that will be underpinned by reconstruction demand. The operations are expected to give a profit of more than US$360m for the current fiscal year.

Taiheiyo has reported that cement production at its Ofunato plant in Iwate Prefecture has returned to about 70% of the levels seen before the 11 March 2011 earthquake and tsunami disaster. The company is scrambling to repair the production base with an eye toward returning the facility to full capacity at the end of June 2012. In the autumn the firm will start producing high-tensile cement for use in repairing infrastructure in the disaster-hit Tohoku region.

Taiheyo Cement will also shake up its sluggish US business, which is on track for an operating loss of US$108m in the current fiscal year. On top of personnel reductions, the company will continue to sell land and make other downsizing efforts. An operating profit of US$120m for US operations is targeted by the 2014 fiscal year.

US: Lafarge US has announced that it has laid off 36 workers at its plant at Joppa, Illinois, representing about one-third of the plant's total workforce. The layoffs, which took place Thursday 15 March 2012, were cited as the result of the closure of one of the two kilns at the plant, which has a total installed capacity of 1.25Mt/yr.

The kiln has been mothballed due to consistent low cement demand, with Lafarge saying that local sales have fallen by 44% in recent years.